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Nick Scali Releases Half-Yearly Results: Up Over 10% Upon Open

Nick Scali Releases Half-Yearly Results: Up Over 10% Upon Open
Feb 09, 2016 By Ben Khouri Tags: NCK

Furniture retailer Nick Scali (ASX:NCK) have released their half-yearly results for the period ending 31st December 2015. Profits were at a record high for the half-year. The board of Nick Scali has a positive outlook for the rest of the FY16.

Half-Yearly Results

NPAT (Net Profit After Tax) was at a record $14.1 million for the half-year. This was a 41% increase to the PCP (H115: $10 million). This significant expansion in profit was supported by a 32% increase in sales revenue ($102.5 million) and maintained store sales growth of 11.6%. Operating expenses as a percentage of sales were reduced to 39.5% (H115: 41.2%).

Furthermore, net operating cash flow grew to $9.5 million, a 64% increase to the PCP. This positive result was further supported by 41% growth in receipts from customers.

Managing Director Anthony Scali commented on the results: “Total sales order growth of 37% and comparative sales order growth of 12% was achieved on the back of very strong July and November trading months in particular. We have opened 9 new stores during the 2015 calendar year, which all performed in line with expectation and positively influenced the overall result for the half. We are very pleased with the top line together with holding margins at 60%, despite the falling Australian dollar.”

Store Growth

During the period, the furniture retailer continued to expand, opening two new stores. One in Casula (NSW) and Midland (WA). Over the next 12 months, Nick Scali are expecting to open 4-6 new stores. This is in line with their growth target of 75 stores within Australia/New Zealand.

Dividend

The Directors have declared a fully franked interim dividend of 9 cents per share. The record and payment date are on the 2nd and 23rd of March 2016 respectively. This compares to a 7 cent dividend for the previous corresponding half year.

Outlook

January 2016 saw a 24% increase total sales orders, along with 3.3% growth in comparative sales orders to the PCP. The furniture retailer expects ongoing sales growth for the second half of the 2016 financial year.
Current forecasts for net profit after tax for FY16 are between $22-24 million.

Share Performance

Investors have reacted very positively to the series of announcements, with NCK surging over 10% upon open (As at 10.09am AEDT), to $4.55. For the year 2016, NCK has had a moderate return of approximately 6.5%.

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Ben Khouri Author: Ben Khouri Feb 09, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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